Exceptions to the “Automatic Stay”

The “Automatic Stay”

The “automatic stay” is one of the most powerful tools of bankruptcy. It’s the law that automatically goes into effect right when your bankruptcy case is filed, and stays—or stops —all collection activity against you and your property.

Although the “automatic stay” protects you against just about anything a creditor can do to collect on a debt, there are exceptions. It’s important to know the exceptions so that you are not caught off guard.

The Exceptions

Here is a list some of the most common exceptions to the “automatic stay.” The following kinds of creditors can do the following even after you file bankruptcy:

Criminal matters: A district attorney or other similar prosecutor can begin or continue an ongoing criminal case against you. This includes issuing an indictment, holding a criminal trial, or having a sentencing hearing. This includes not just felonies or serious misdemeanors, but sometimes also more routine matters like traffic violations that you might not think of as “criminal.”

Divorce proceedings: Your ex-spouse, about-to-be ex-spouse, your child, or some person or governmental agency on their behalf, can start or continue a variety of divorce and family court proceedings. These include legal procedures to establish paternity of a child, determine or change the amount of child or spousal support to be paid, settle child custody or visitation issues, address domestic violence disputes, and even dissolve the marriage. (However, a marriage dissolution does violate the automatic stay if it includes the division of assets or debts between the spouses.)

Child and Spousal Support: On the specific issues of child and spousal support, the person who is owed ONGOING support can continue collecting it. If there is BACK support owed, the person who is owed the support can start or continue collecting it in spite of a Chapter 7 filing. This includes not only through wage withholdings and garnishment of bank accounts, but also seizure of tax refunds and other possible aggressive means. In contrast, the person owed the BACK support must stop collecting on that IF a Chapter 13 is filed arranging to catch up on that back support.

Taxes: Regardless of your bankruptcy filing, the IRS or other taxing authorities can start or finish a tax audit, can send you a notice that you owe taxes, can demand you to file your tax returns, can assess your taxes and demand you to pay them, and in some limited situations can even file tax liens against you and your property.

Conclusion

Again, each of these exceptions to the “automatic stay” applies only to certain special kinds of creditors and/or debts. The automatic stay DOES stop MOST actions against you by MOST creditors. For most people filing bankruptcy, ALL collection action is stopped for ALL of their creditors. That will likely be the case for you, unless you are involved in a court proceeding or collection efforts by the criminal or taxing authorities, or by an ex-spouse or support enforcement agency.

If you are in the Dallas-Fort Worth Metroplex, and especially in or around Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, Royse City, Sachse, and Rowlett, Texas. I’d be happy to provide you a free and confidential consultation about your options. I’m Carrie Weir, a bankruptcy lawyer with 20 years of experiencehelping people like you get the full protection provided by the bankruptcy law. I can meet with you for a free legalconsultation meeting. To arrange this, call me at 972-772-3083, or after business hours usethis contact form. Thank you for checking out my website.